Here are the key updates that can affect how investors begin their day of trading:
1. Market Movements
On Wednesday, both the Nasdaq Composite and the S&P 500 went up for the fifth consecutive day. The S&P saw a tiny increase of 0.08%, but still set a new record for closing at an all-time high. The Nasdaq, driven by a broader tech surge, ended the day 0.36% higher.
However, the Dow didn’t join the rally due to significant declines in Verizon (over 2%) and 3M (over 3%), both of which reported earnings on Tuesday. Netflix, on the other hand, experienced a notable rise of more than 10% after reporting earnings on Tuesday.
2. Between Waves
Tesla’s stock dropped by 8% in premarket trading after it reported lower-than-expected fourth-quarter revenue and profit. The electric vehicle company also cautioned that the growth in vehicle volume for 2024 might be significantly less than the growth rate seen last year.
Automotive revenue only increased by 1% compared to the previous year, partly because electric vehicles were selling at lower prices than before. Tesla had implemented substantial price reductions globally in the second half of the year. During a presentation on Wednesday, the company informed investors that it is currently in a phase between two major periods of growth.
3. Facing a Decision Point
Economists on Wall Street are considering the possibility of a more noticeable slowdown in the U.S. economy. The U.S. Commerce Department is set to reveal its report on the gross domestic product for the fourth quarter on Thursday morning.
Analysts expect it to show a growth rate of 2% on a seasonally adjusted annualized basis. This would be a decrease from the 4.9% growth seen in the third quarter and the lowest since a 0.6% decline in the second quarter of 2022.
Despite this, attention on Wall Street might soon shift to what this means for growth prospects in 2024. As investors analyze the fourth-quarter report, two key factors will be in focus: the current state of consumer spending and inflation.
4. Financial Fallout
Alaska Airlines revealed that the grounding of Boeing 737 Max 9 planes will result in a financial loss of $150 million for the company. The Max 9s were grounded several weeks ago after a door plug blew out during an Alaska Airlines flight at an altitude of 16,000 feet, causing damage to the side of the aircraft.
In a disclosure on Thursday morning, the airline mentioned that it had initially anticipated a capacity growth of 3% to 5% this year. However, due to the grounding, it now expects the growth to be “at or below the lower end of this range.”
This announcement from Alaska Airlines followed the Federal Aviation Administration’s decision on Wednesday to clear the planes for return to service. However, Boeing’s plans to increase production of these planes have been put on hold.
5. Focus on Customers
Comcast performed better than expected in the fourth quarter, surpassing predictions for both revenue and profit.
The company also experienced a smaller loss of broadband subscribers than analysts had foreseen. Instead of the expected 62,000, Comcast lost 34,000 domestic broadband subscribers, as reported by StreetAccount. Additionally, on Thursday, Comcast announced a 7% increase in its dividend. This marks the 16th consecutive year of dividend increases for the company.
Meanwhile, NBCUniversal’s streaming service, Peacock, had a notable achievement. It gained 3 million subscribers and recorded a 51% increase in revenue, reaching $1.03 billion. This marks the first time Peacock has surpassed the $1 billion mark in a single quarter.
The stock market had some ups and downs. Tesla faced difficulties, indicating a possible economic slowdown. Alaska Airlines had financial problems due to issues with Boeing 737 Max 9 planes. On a positive note, Comcast did better than expected, and Peacock, NBCUniversal’s streaming service, gained a lot of subscribers and revenue.